Hello Sir,

Hope you are doing well.

Wee have released our new stock recommendation for our Premium Members and would like to share with you details on the same.

It’s a pharmaceutical company consistently growing at 20% + on YOY basis and we believe it’s a strong secular growth stock available at reasonable valuations of around 20 times earnings.

In the past, pharma stocks like Aarti Drugs, Suven Pharma, etc. have delivered 400-500% return to our members; let’s see how the new one performs.

Some basic financial numbers about the company are as below:

  • Industry – Pharmaceuticals
  • Market cap - < than 5,000 crore
  • Sales growth – 20% CAGR for the last 5-10 years
  • Operating profit growth – 30% CAGR for the last 5-10 years
  • Avg. ROAE – around 20%
  • Avg. debt to equity – 1.2
  • Net debt – Currently debt free on net basis
  • PE – 18-20 times FY 22 (E)

Besides the extraordinary numbers and reasonable valuations, what more do we like about the company –

  • Over the last 4-5 years, it has started focusing on higher margin branded domestic business and international sales
  • Company’s field force has grown by 4x in the last 6 years
  • The company has been continuously launching new products and also introducing new therapies. In FY 21 it launched around 13 products and expected to launch 40 more in the next 18-24 months
  • Despite the continuous expansion in capacity, the company is now debt free on net basis. The upcoming capex will also be funded mostly through internal accruals
  • Management is guiding for 15-20% YOY growth in sales and around 200-300 bps expansion in operating margins

Overall, looking at several positive transformations, excellent track record and reasonable valuations, we have recommended the stock to our members and also added it to our model portfolios and smallcases.

If you are looking for investment opportunities do check out our premium subscriptions. 


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/